We provide a brief historical outline of the development of the Gaddafi regime from the bourgeois Arab nationalism of the early days, to the period of so-called Islamic socialism, to the recent period of opening up to foreign investment, with major concessions to multinational corporations and the beginnings of widespread privatisations.

Gaddafi came to power in a young officers ´coup in 1969, which was clearly influenced by the panarabism of Nasser’s Egypt. Under the previous rule of King Idris, Libya had been totally under the thumb of imperialism. He became associated with the Free Officers' movement, a group of junior officers in the Libyan Army who had a deep sense of anger and shame at seeing the Arab armies defeated in the 1967 war with Israel. Gaddafi's aim was to modernise Libya and develop the economy. However, as he attempted to do this on a capitalist basis he came into conflict with the interests of the imperialists, for example taking over the property of former Italian colonisers or, as in 1971, nationalising the assets of British Petroleum. In the process he also expelled US bases from Libya.

Retaliatory measures by the British government contributed to pushing Gaddafi to seek economic help from the Soviet Union. This came in 1972 when the Soviet Union signed a deal with Libya to help develop its oil industry.

During the same period, however, Gaddafi was very clear in expressing his anti-Communism. In 1971, he sent a plane full of Sudanese Communists back to Sudan where they were executed by Nimeiry. In 1973 the regime published an official document to commemorate the fourth anniversary of Gaddafi’s rise to power, under the title “Holy War Against Communism” in which we read that, “the biggest threat facing man nowadays is the communist theory.”

The Nixon administration, in spite of Gaddafi having expelled US bases, saw him as a beneficial influence in the Arab world, precisely because of his anti-communism. This was expressed also on the international arena. Initially Gaddafi was not pleased at Egypt’s close relationship with the Soviet Union. In the Yemen he was for unification of the North and South, but on the basis that the South should abandon its pro-Moscow stance. He supported Pakistan against India in the 1971 war on the basis that India was aligned with the Soviet Union.

What produced a radical change in Gaddafi’s stance was the worldwide recession of 1974. This had deep repercussions within Libya, leading to growing social unrest. This in turn produced divisions within the regime, with some sections reflecting the interests of the weak capitalist elements within Libyan society, while Gaddafi himself proceeded to move against these elements.

The inability of the nascent Libyan bourgeois to develop the economy, led Gaddafi to shift from his earlier policy of attempting to develop indigenous Libyan capitalism to what was to become an economy dominated by state owned enterprises.

Some of the army officers involved in the initial 1969 coup against the monarchy that brought Gaddafi to power broke with him on this specific question and organised an attempted coup in 1975 to try and stop his programme of nationalisations.

Some of these are now playing a role in trying to overthrow Gaddafi today, such as Omar Mokhtar El-Hariri the newly appointed Minister of Military Affairs in the present Interim Government of the opposition.

Gaddafi successfully crushed the 1975 coup and proceeded subsequently with his programme. He ended up by taking over most of the economy and leaning towards the Soviet Union. By 1979 the private sector had been almost completely eliminated.

To provide some kind of ideological backing to what he was doing, he wrote the first part of his famous Green Book in 1975 and in 1977 he changed the official name of the country to the “Great Socialist People's Libyan Arab Jamahiriya”, Jamahiriya meaning the “state of the masses”. In his book he presents his version of “socialism”, an Islamic version that rather than viewing the class struggle as the key to moving society forward, sees the class struggle as a dangerous deviation. In effect his book was simply a cover for a regime that allowed no freedom of organisation or strike for the workers, but claimed to be building some kind of socialism, which of course it was not.

It was in this period that some groups on the left became open cheer-leaders for Gaddafi, uncritically supporting his regime. This ignored some not unimportant details. For example, in 1969 Gaddafi had banned independent trade unions and strikes were completely banned a few years later. Once real labour organisations had been banned, state-controlled “unions” were set up. What was thus created was a totalitarian regime, under the tight control of Gaddafi himself.

In spite of this brutal dictatorship, a combination of large oil reserves, and thus income, and a large public sector, allowed for the development of an extensive welfare state. In this we have to understand that Gaddafi was able to build a significant base of support for himself among the population. Some of that support has survived to this day as we can see in Tripoli and other areas of the country.

A layer of the population, particularly among the older generation, will remember what it was like under King Idris and will also recall how Libya developed subsequently under Gaddafi.

Since then, however, many important changes have taken place on a world scale that deeply affected Libya. A key element was the fall of the Soviet Union and its East European satellites that ushered in the return to capitalism in all these countries. These events had a major impact on the direction taken by China towards capitalism. How could a small country like Libya escape such a process?

It is in fact in 1993 that we see the first tentative steps of the regime to begin a process of “economic liberalisation” or “infitah” as it was known. Decree No.491 in 1993 allowed for the liberalization of the wholesale trade. This was followed later that year and in 1994 with legal guarantees to cover foreign capital investment as well as the convertibility of the Libyan Dinar.

However, it is also true to say that although the intention was there, in practice this led to very little movement in the direction of full-fledged privatisation. The main beneficiaries of the nationalised economy, the middle and senior managers, the officer caste, the technocrats who ran the oil industry as well as the state bureaucrats, had little interest in changing the status quo.

The relative independence that Libya enjoyed while the Soviet Union existed determined the conflict with imperialism that put Libya in the position of being classed as a “rogue state” together with other regimes such as that of the Ayatollahs in Iran or of Serbia under Milosevic. In 1986, Reagan ordered a bombing raid against Libya with the declared aim of killing Gaddafi. He survived, but the raid caused some 60 victims. The 1988 bombing of Pan Am Flight 103 over Scotland also helped to provide the excuse for the sanctions that were imposed on the country. This, together with falling oil prices in the nineties and into the early 2000s, caused significant economic pain to the country. The 2003 invasion of Iraq by imperialism, leading to the death of Saddam Hussein and the overthrow of his regime served also as strong pressure towards abandoning any pretence of an anti-imperialist stance. The excuse for the invasion of Iraq had been the alleged presence of weapons of mass destruction, something imperialist powers were also accusing Libya of. The combination of all these factors is what determined a radical shift in policy.

In June 2003 Shukri Ghanem, considered a “reformist”, i.e. a free marketer in favour of privatisations, was appointed as Prime Minister. In the same year Decision No.31 put forward the proposal for 360 state owned enterprises to be privatised over a period from January 2004 to December 2008. By the end of 2004, 41 enterprises had already been privatised. This was slower than expected, but the process had clearly begun. As part of this process in January 2007 the Libyan government announced plans to lay off 400,000 public sector workers, more than one-third of the overall government workforce.

In December 2003, Libya renounced its programme to develop “weapons of mass destruction”. This was just after the US had invaded Iraq. Gaddafi’s shift allowed Bush to present his policy in Iraq as one that was paying off, as a former “rogue regime” such as the Libyan was now being brought back into the fold. UN sanctions were thus lifted in 2003 and a year later the US lifted most of its sanctions also. Diplomatic relations were re-established in 2006.

As a result of all this Libya started attracting a lot of foreign direct investment, mainly in the energy sector, but also in civil engineering. Many contracts were signed giving concessions to western oil and gas companies, such as Italy’s AGIP, British Petroleum, Shell, Spain’s Repsol, France’s Total and GFD Suez, as well as US companies such as Conoco Phillips, Hess, and Occidental, Exxon and Chevron, as well as Canadian, Norwegian and other companies.

In this period the Gaddafi regime moved closer and closer to the imperialists. The press of recent years is full of stories about western businesspeople and politicians visiting Libya and making lucrative deals. An example is an article, “The Opening Of Libya”, that appeared in Business Week on March 12, 2007:

“Much of the progress [in opening up the Libyan economy] is due to an unusual partnership with Harvard Business School professor and competitiveness guru Michael E. Porter, who is advising the Libyans through Boston consultancy Monitor Group. For the past two years, more than a dozen Monitor consultants have been working in Libya, studying the economy and running a three-month leadership program intended to create a new pro-business elite (..)

“Porter was persuaded to take the job by Qaddafi's son, Saif al Islam. The former London School of Economics graduate student is a lean man who favors expensive European suits and Western-style economic reform. Since first meeting Saif at several dinners in London, Porter has traveled to Libya three times and met top government officials, including the elder Qaddafi.”

Saif al Islam, one of Gaddafi’s sons, is renowned for being in favour of “liberalising” the economy, and has been pushing for more and more “liberal” economic policies, i.e. greater privatisation! But as Business Week quoted, Saif explained that, "We need to change from a state economy to an open economy, but without it being out of control."

What Saif meant with these words was an opening up of Libya’s economy, with privatisation of state owned enterprises, but making sure that the Gaddafi family and its entourage gets the lion’s share of these enterprises in collaboration with western multinational corporations... and without renouncing the dictatorial powers of the regime itself.

Since Libya was taken off the list of “rogue states”, a whole swathe of western politicians have been to Libya, shaking hands and embracing Gaddafi... and signing excellent deals for their respective national companies.

In 2008 Berlusconi signed a deal to pay Libya US$5 billion in compensation for Italy’s colonisation of Libya in the past. Part of the deal also involved Libya policing the Mediterranean coast to stop African immigrants getting to Italy. The fact that Gaddafi used brutal means to achieve this seemed to be of no concern to western governments at the time.

This was followed by an official visit from the then US Secretary of State, Condoleezza Rice the same year, the first such visit since 1953. But it was Tony Blair who started the process when he visited Gaddafi back in 2004, establishing a “new relationship”... and bringing home some very lucrative oil contracts for Shell!

Thus we see how the aura of “anti-imperialism” that Gaddafi may have had in the past evaporated in the past decade. He has been collaborating fully with imperialism, de facto returning to the Gaddafi of the early 1970s. His regime has been based on making deals with imperialism and even helping them directly as the case of Italy demonstrates.

He was also helping them in their so-called “war on terror”, passing information to both the CIA and MI6 on suspected Islamic fundamentalists from Libya. A leaked cable from the US embassy in Tripoli from August 2009, described how “Libya has acted as a critical ally in US counter-terrorism efforts, and is considered one of our primary partners in combating the flow of foreign fighters”. The cable emphasised that the US-Libya “strategic partnership in this field has been highly... beneficial to both nations”. It is therefore clear that Gaddafi is not an anti-imperialist. He had become a useful collaborator of the imperialists in the recent period.

All this also explains his surprise at being attacked by NATO forces in the recent period. He felt he had done everything that he needed to do to avoid ending up like Saddam Hussein. However, because of his past, Gaddafi was never fully trusted; he was a bit of a wild card. He was collaborating yes, fully and willingly, but when the imperialist powers saw a chance of replacing him with someone even more subservient they did not hesitate in seizing the opportunity.